Ella van Gool is a seasoned Dutch professional working in the ever changing world of Silicon Valley Venture Capital. She has spend the last 10 years cultivating meaningful relationships with budding entrepreneurs and facilitating their path to success by sharing her knowledge and connecting people within her vast network.
Ella currently holds the position of SVP of Venture Capital Relations at Square 1 Bank, was Venture Pipeline Manager at DLA Piper fulfilled the role of Chief Representative at the Netherlands Business Support Office and began her tenure in the Valley in 1995 as VP of Marketing at Translogic Medical Devices.
During her interview with Holland in the Valley, Ella generously shared her advice on the the do’s and dont’s of Venture Financing for international start ups.
Keep in mind that on average only 1 in 1,000 business plans received by a VC firm actually receives funding.
The better prepared you are on how the game works, the better your chances of getting funded will be.
Be Successful in Holland First
Don’t run for greener pastures before you’ve tended to your own garden. Before making a move to Silicon Valley, it’s best that you have an established business back home- one with paying clients, a solid team of co-founders to continue running the business at home and enough cash flow to sustain itself in Silicon Valley for 6-9 months.
Coming into the game with a proven track record will dramatically increase the credibility of your business model and place you at an advantage over most companies competing for VC funding..
Research Potential Investors
Always be prepared before approaching a VC firm. Understand their investment strategy, business model, reputation and current investment portfolio. I recommend making a few trips to the Valley over a 6 month period to start building relationships within the Silicon Valley ecosystem. Get a feel for who would be a good fit for your business goals and whether they have a sincere interest in your company. If the results of your meetings are favorable, you may be ready to take the next step.
Relocate to Silicon Valley
Silicon Valley VC firms typically only invest in companies that have a local office presence as they play an active business role in their investment companies Remember, VC funding is a business partnership, not a loan. It’s a long-term relationship, and like any other relationship, long distance rarely works out.
Hire an Experienced Venture Lawyer
Even before you land a meeting with an investor, be sure to network with and or hire an experienced venture lawyer. You will be glad you did. Not only will they provide you with the essential advice you need before entering into an agreement with a VC firm, they will also help make introduction to qualified investors.
Go in Cold
Never send an e-mail directly to a VC firm asking if they want to fund you. It won’t work. Business in the Valley is built on trusted relationships, so the first move is to get a “warm introduction” to a potential investor through a mutual friend. The Silicon Valley ecosystem functions on networking and more often than not people are willing to introduce you to their contacts. Play your cards right though as reputation is everything and the best way to maintain a good one is to reciprocate in kind to those who make introductions for you.
Think You’ll Get a Second Chance
Most start up entrepreneurs don’t realize they only get one shot to pitch a VC. It’s very hard, if not impossible to correct a bad first impression or meeting. Keep in mind that VCs are generally casual, yet conservative. Don’t try to overcompensate with formal business attire or a lengthy presentation full of boring data and graphs. VC have limited attention spans and they’ve heard it all before. Strive to be different. Convey confidence, but don’t overdo it by being a know it all. VCs don’t respond well to those who come off sounding like they have nothing to learn. Maintain a sensible level of humility.
Have your pitch ready to go at all times. You never know who you’re going to meet. Think of every encounter as a practice run. Pay attention to which pieces of your pitch people most favorably respond to, which pieces they don’t understand, then edit, refine and re-pitch it. Remember, the first meeting with a VC typically lasts 1-hour and it’s critical to capture their attention within the first few minutes. Having practiced, tested and refined your pitch over time will help you properly set the stage when your one shot opportunity comes.
Think Your Just Getting a Check
VC money doesn’t come without serious commitment and entrepreneurs have to consider the costs when deciding to enter into a contract with a VC firm. Ask yourself if your company really needs the money and if the company is ready to scale up. The firm will have a serious influence in the direction and decision making of your company. They will sit on your board of directors and being major shareholders, will have considerable voting power. It’s not uncommon for the CEO to be replaced with someone better able to secure the VCs financial interests. Understandably, many Dutch entrepreneurs are not ready to give up control of their ‘baby’ to an outsider CEO, but it could happen.